Google's profitability doesn't stop creators' drive toward perfection

By Mary Anne Ostrom and Matt Marshall
Knight Ridder News Service

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Google services google.com — world's most popular search engine froogle.google.com — search engine for products available online answers.google.com — researchers answer questions for a fee catalogs.google.com — search engine for online mail-order catalogs groups.google.com — search, post comments in Usenet discussion groups images.google.com — search images on the Web news.google.com — searches updated news sources

In Silicon Valley, the company in Mountain View, Calif., is the hottest private company around, with a good shot at becoming a business legend such as Netscape, Apple or eBay.

Founded by a pair of Stanford graduate students in 1998, Google reinvented online searching. The company says it handles 200 million searches a day and, according to some estimates, about 75 percent of all search-engine-generated traffic to Web sites.

The site makes it possible to search instantly for virtually anything on the Web. Google is an encyclopedia, phone book, shopping catalog, news archive and gossip sheet rolled into one.

"Google has made knowledge a habit," said Barbara Quint, a librarian and editor of Search Magazine.

The company is also a rare reminder that there is financial promise in the Internet. Google, with 800 employees and growing fast, won't disclose its finances.

But speculation within the industry is that Google will ring up $400 million to $700 million in sales this year, most of it from using technology to target relevant ads to Web users. The company says it has been making money since December 2000.

Yet profits don't seem to be enough for Google's two ambitious young founders. Their ethos of thinking big evokes other celebrated valley companies that tried to change the world through technology. The mindset has trickled down through Google's staff and is enforced by an official policy that company engineers devote a quarter of their time to thinking up great, new ideas — even if their financial promise is questionable.

In many ways, co-founders Larry Page, 30, and Sergey Brin, 29, have the quintessential valley story: using Stanford as a lab for their brainchild, launching in a garage and attracting high-tech's premier venture capitalists.

They represent a new dot-com generation focused on perfecting their product and turning a profit before going public, not after.

While many investors and employees would love to see a Google initial public offering, the two founders recently have dampened those expectations. Going public would invite scrutiny of the company's bottom line, which could lead to short-term thinking and cautious strategy, they warned.

Instead, Google is tackling one of the biggest challenges of modern life: helping people find information that's important to them.

"It's a really important, big problem for the world," Brin said.

As for holding off on an IPO, he added: "Right now, I think we're really enjoying the time when we can have a lot of freedom and be as impactful as we possibly can."

Embedded in pop culture

Brin and Page so far have had their way, demanding only the sharpest technology, hiring only the smartest of employees (Google once required SAT scores of job candidates), and plowing ahead with ideas, sometimes quirky, that will take Google deeper into the lives of Internet users.

Without spending a dime on a branding campaign, Google has embedded itself in popular culture.

On a night when game-show host Regis Philbin asked a million-dollar question on "Who Wants to Be a Millionaire," Google registered tens of thousands of queries from users researching the answer.

Philbin wanted to know the maiden name of Carol Brady of TV's sitcom "The Brady Brunch." The answer, Tyler, is derived from near-instantaneous searches of a giant network of Google servers that index more than 3 billion Web pages. (Today, that search returns 3,440 Web links in 0.19 seconds.)

These days, Google is expanding its search territory to compete with bigger and broader Internet players such as MSN and Yahoo.

There's Google News, thought up on an employee's whim, which offers up-to-the-minute news stories culled from 4,500 sources. There's the indexing of photos and catalogs. There's Froogle .com, a product search site.

Google's biggest money-maker is advertising. It gets paid to place small text ads above and next to noncommercial search results on its site and the sites of partners such as America Online and Amazon.com.

Google says its 100,000 advertisers make it the world's largest Web-ad network.

Google started with two Stanford computer science students, both sons of math professors. Brin, born in Moscow, and Page, from Michigan, sought to prove that a mathematical analysis of the links among Web sites could produce better search results than simply counting keywords. They defined relevancy by the number and quality of links to a Web site.

They called it Page Rank, after Larry Page. And the process could be completely automated, with no human editors.

The founders and first few employees met around a pingpong table in a Menlo Park garage. During a 1998 meeting with early investors, Sun Microsystems co-founder Andy Bechtolsheim tired of listening to Brin and Page worry about spending money. He raced back to his Porsche and insisted on writing them a $100,000 check. He made it out to Google.

No such entity existed, forcing Brin and Page to set up the company to cash it. Google is a play on "googol" — the mathematical term for a 1 followed by 100 zeros — a reference to organizing the seemingly infinite Web.

By June 1999, Brin and Page had attracted more than $25 million from two legendary venture capitalists: John Doerr of Kleiner Perkins Caufield & Byers, and Michael Moritz of Sequoia Capital.

The founders resisted when pushed by those backers to hire a chief executive, taking a year to agree on a choice. Eric Schmidt, the former Novell CEO and onetime Sun Microsystems executive, joined Google in August 2001.

The heart and soul

Although they have given up a sizable stake in the company to venture capitalists, the eccentric founding pair are Google's cultural soul and, along with Schmidt, run the company.

Page is the more cerebral of the two, the big thinker who also worries about whether his engineers will like their new digs. Brin, insiders said, has more business instinct, is the negotiator and has a sharp sense of humor that usually involves poking fun at his co-founder.

"Of the two of us, Larry will always take the extreme position," Brin said. When the subject of free employee lunches came up, Page proposed a plan to feed the world. They compromised on free staff lunches and dinners.

Google headquarters, known as the Googleplex, is a throwback to the late 1990s. In the lobby, decorated with lava lamps and giant plastic balls, an engineer takes a break to play a baby grand piano. A pool table is nearby, and Brin and Page zip around on their Segway scooters.

Benefits include company-paid, midweek ski trips to Squaw Valley and maternity and paternity leaves with 75 percent pay.

'Nowhere close' to perfect

The freewheeling culture can lead to some pie-in-the-sky ideas: Over a January dinner at venture capitalist Steve Jurvetson's home, Page and Brin became excited about the idea of rearranging atoms into tiny computers and exclaimed they could create a nanotech lab at Google. The company says there are now no such plans.

"It is like Netscape in the early years — kids sleeping on the cots, the dogs are in there, they've stacked up the beer cans," Doerr said.

But Google has a discipline, albeit unconventional. Engineers — including more than 60 with doctorates — work in committees of three to develop new projects. The trio with the most ambitious but plausible idea gets the most backing.

As Page explained: "You'll get more resources within the company, you get people more excited, you get people outside writing about it."

While most of the tech world buzzes about an IPO, Google's founders hold firm to their technological ambitions — building, in Page's words, "the ultimate search engine."

"It would understand exactly what you type and would give you the right things back," Page said.

"We're pretty good, but we're nowhere close to being perfect. We won't be for a long time."